Punjab-Haryana High Court
M/S Kohinoor Sales And Anr vs Ld. District Magistrate-Cum-Deputy ... on 6 May, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:062023-DB
CWP-12042-2022 (O&M) 1
219 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-12042-2022 (O&M)
Date of Decision: 06.05.2024
M/s Kohinoor Sales and another ....Petitioners
versus
Learned District Magistrate-cum-Deputy Commissioner,
Malerkotla and others ..... Respondents
CORAM : HON'BLE MRS.JUSTICE LISA GILL
HON'BLE MRS. JUSTICE AMARJOT BHATTI
***
Present: Mr. Sunny K.Singla, Advocate for the petitioners.
Mr.Aditya Sharda, DAG, Punjab.
Mr.Rakesh Gupta, Advocate for respondents No.2 to 4.
***
LISA GILL, J. (ORAL)
1. Prayer in present writ petition is for directing respondents to
regularise the accounts of petitioners on the ground that they are ready and
willing to deposit the overdue instalments. Petitioners have also challenged
possession notice dated 19.04.2021 (Annexure P-8) issued by the
respondents-bank under Section 13 (4) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 (for short 'SARFAESI Act').
2. Learned counsel for petitioners submits that Cash Credit Limit
was availed of in the year 2006 for a sum of Rs, 25,00,000/- from
respondents No. 2 and 3. Property (residential house) as detailed in para 2
of writ petition was mortgaged with the respondents-bank. In the year 2019
Cash Credit Limit was converted to loan against property for the loan
1 of 4
Neutral Citation No:=2024:PHHC:062023-DB
amount of Rs.24,50,000/-. Due to outbreak of Covid-19 pandemic
petitioners suffered losses which resulted into financial indiscipline.
Learned counsel for petitioners submits that petitioners are ready and willing
to have their accounts regularised but the respondents-bank, in an illegal
manner, proceeded to declare the accounts Non Performing Asset (NPA) on
24.09.2020. Notice under Section 13(2) of SARFAESI Act was issued on
04.02.2021 and under Section 13(4) of the Act on 19.04.2021. Proceedings
under SARFAESI Act, it is submitted, are in absolute derogation of the
applicable provisions of law and mandate of various circulars issued by RBI.
High penal interest and other expenses have illegally been levied upon
petitioners. It is thus prayed that this writ petition be allowed.
3. Learned counsel for respondents has opposed the writ petition.
Preliminary objection qua entertainability of the writ petition has been raised
in view of alternate remedy available to petitioners under Section 17 of
SARFAESI Act. All allegations about violation of applicable rules have
been denied while submitting that entire action taken under SARFAESI Act
is in complete consonance with provisions of law and RBI circulars. In fact,
it is petitioners' attempt to delay recovery proceedings at every step.
Petitioners have admitted their default in communication dated 07.03.2022
but have not even come forward to give any timeline for deposit of the
overdue amount. A sum of Rs. 30,40,000/- was due from petitioners as on
08.02.2024. No amount has been deposited by petitioners after a sum of
Rs. 2 lakhs in terms of order dated 30.05.2022. It is thus prayed that this
writ petition be dismissed.
2 of 4
Neutral Citation No:=2024:PHHC:062023-DB
4. Having heard learned counsel for the parties, we do not find any
ground what-so-ever to interfere in exercise of jurisdiction under Article 226
of the Constitution of India. Petitioners admittedly have an efficacious
remedy under SARFAESI Act for redressal of their grievances. SARFAESI
Act is a complete Code in itself, providing for remedies in case of any
grievance arising from proceedings taken thereunder. Interference in the
same in exercise of writ jurisdiction has to be minimal and restricted to
exceptional or extraordinary circumstances. Gainful reference in this regard
can be made to the judgments of Hon'ble the Supreme Court in Union Bank
of India v. Satyawati Tandon and others, 2010(8) SCC 110, and M/s
South Indian Bank Ltd. and others v. Naveen Mathew Philip and
another, 2023(2) RCR (Civil) 771. Hon'ble the Supreme Court in the case
of M/s South Indian Bank (supra) while reiterating its earlier judgments
held that where an alternate efficacious remedy is available to the litigant
before a Forum constituted under a statute, interference by the High Court in
exercise of jurisdiction under Article 226 of Constitution of India should be
restricted to exceptional cases. It was held as under:-
"15. The object and reasons behind the Act 54 of 2002
are very clear as observed by this Court in Mardia
Chemicals Ltd. v. Union of India, (2004) 4 SCC 311.
While it facilitates a faster and smoother mode of
recovery sans any interference from the Court, it does
provide a fair mechanism in the form of the Tribunal
being manned by a legally trained mind. The Tribunal is
clothed with a wide range of powers to set aside an
illegal order, and thereafter, grant consequential reliefs,
3 of 4
Neutral Citation No:=2024:PHHC:062023-DB
including re-possession and payment of compensation
and costs. Section 17(1) of the SARFAESI Act gives an
expansive meaning to the expression "any person", who
could approach the Tribunal.
XXX
18. While doing so, we are conscious of the fact that the
powers conferred under Article 226 of the Constitution of
India are rather wide but are required to be exercised
only in extraordinary circumstances in matters pertaining
to proceedings and adjudicatory scheme qua a statute,
more so in commercial matters involving a lender and a
borrower, when the legislature has provided for a specific
mechanism for appropriate redressal."
5. Keeping in view the facts and circumstances of the matter, writ
petition is dismissed with liberty to the petitioners to avail the statutory
remedy/remedies in accordance with law in respect to proceedings initiated
against them. Needles to say, it is always open to parties to arrive at any
mutually acceptable settlement. There is no expression of opinion on the
merits of the matter.
6. Pending miscellaneous applications, if any, stand disposed of
accordingly.
(LISA GILL )
JUDGE
(AMARJOT BHATTI)
JUDGE
06.05.2024
sunita
Whether Reasoned/Speaking : Yes/No
Whether Reportable : Yes/No
4 of 4
